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Foreign nationals can finance ballot initiatives, FEC affirms

In a July vote to be made public this week, commissioners found that ballot initiatives don’t count as elections under federal law

Primary election absentee ballots are counted in New York in July. Voters on Nov. 2 weighed in on ballot measures in several states. The Federal Election Commission recently determined that foreign nationals are not barred under federal law from financing efforts related to ballot initiatives. (Mary Altaffer/AP)
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The Federal Election Commission has affirmed in a not-yet-public decision that foreign nationals can finance efforts related to ballot initiatives, deciding that the federal ban on foreign money applies only to candidate elections.

In a 4-2 vote in July, commissioners dismissed a complaint against a Canadian subsidiary of an Australian mining company that helped finance efforts to defeat a 2018 Montana ballot measure that would have beefed up environmental protections.

Federal law prohibits foreign nationals from making contributions in connection with federal, state or local elections but is silent on spending related to ballot initiatives, which put proposed statutes and, in some instances, constitutional amendments up to popular vote, according to an FEC legal analysis sent last month to parties in the dispute and obtained by The Washington Post. Documents related to the case will be made public this week, according to a letter included with the analysis.

The decision, which was first reported by Axios, is consistent with established interpretations of federal election law, campaign finance experts said. At the same time, it does not address whether certain types of ballot initiatives that explicitly involve a candidate or bear directly on elections, such as redistricting measures, might trigger the federal ban on foreign money, said Ellen Weintraub, a Democratic FEC commissioner.

“This should not be viewed as open season for foreigners to try to influence ballot initiatives that affect our voting process,” she said in an interview, arguing that the scope of the rules should be clarified by federal statute.

Weintraub said she voted against the complaint’s dismissal but would otherwise not comment on the specifics of the vote. Other people familiar with the matter, who spoke on the condition of anonymity to describe what is still a nonpublic matter, said the commission’s Democratic chairwoman, Shana M. Broussard, voted with her three Republican colleagues. Broussard declined to comment before the public release of documents in the case, which she said would take place on Friday.

David Brooks, executive director of Montana Trout Unlimited, one of the complainants in the case, expressed surprise over the decision, which he said enabled foreign interests to “exert significant influence on American policy or statewide policy.” His group’s allegation was that the Canadian subsidiary, Sandfire Resources, had made illegal contributions to committees opposing the ballot measure, Montana I-186, which would have created new requirements for hard-rock mine permits based on water standards. The measure was defeated.

But Robert K. Kelner, who chairs Covington & Burling’s Election and Political Law Practice Group, said the decision was in line with statutory law as well as prior determinations by the FEC.

“I think most members of the election bar have assumed that the foreign national contribution ban would not apply to ballot measure committees, and that’s because the ban on its face really only applies to candidate elections,” he said.

Greater complexity might arise, Kelner allowed, over redistricting measures and other ballot initiatives that influence candidate elections.

The FEC’s decision speaks only to federal rules about foreign contributions. Seven states have passed legislation designed to bar foreign spending on ballot measures, according to the Campaign Legal Center.